Will Russia Dump U.S. Assets For Bitcoin In Response To US Sanctions?

In response to U.S. sanctions, Russia and certain oligarchs are threatening to “dump U.S. assets and U.S. dollars and invest hugely” in Bitcoin.

Photo by Jørgen Håland on Unsplash

Vladislav Ginko, a Russian economist with ties to the Russian government, estimated that the transition from dollars to Bitcoin could start in February. Ginko is an economist at a state-funded institution — the Russian Presidential Academy of National Economy and Public Administration.

“I believe that [the time] is coming when other countries will start doing that and Russia has a brilliant chance to invest into heavily oversold Bitcoin,” Ginko said, according to cryptocurrency news site Micky.

Sanctions against Russia have been in place since U.S. intelligence agencies determined that Russia interfered with the 2016 presidential election and then interfered again following the poisoning of former Russian military officer Sergei Skripal.

“A report in the Telegraph said that from dollars to Bitcoin may involve an intermediary cryptocurrency, likely a token created by a Russian bank, before Russia could buy Bitcoin through a crypto exchange,” Fortune reported.

Not long ago, President Vladimir Putin spoke of his interest in digital assets. There is interest in cryptocurrencies throughout Russia.

“Ginko believes Russia’s de-dollarization decision is fundamentally a move to ‘protect its national interests’ due to a possible interruption of ‘U.S. nominated payments flows for Russian oil and gas’ and claims investment could be as much as $10bn,” the Daily Telegraph reported.

Although the Central Bank of Russia has not confirmed the plans, it did issue a statement to The Daily Telegraph that said it “publishes information on the foreign assets management with a six-month lag.”

There has been a back-and-forth recently between Trump and the Senate over the sanctions. “In a rebuke to the Trump administration on Russia, 11 Senate Republicans joined with Democrats to advance a measure that would stop the Treasury Department from relaxing sanctions on three Russian companies with ties to oligarch Oleg Deripaska, a Kremlin ally,” CNN reported. The Senate vote was 57-42 to proceed to a resolution by Senate Minority Leader Chuck Schumer to reverse the Trump administration’s decision to lift sanctions on the firms.

When sanctions were imposed in 2017, the bill passed by Congress listed 12 types of sanctions that can be imposed and obliges the president to use at least five in many cases against those affected. They can include freezing assets, such as property, revoking U.S. visas and banning exports from the U.S. to those sanctioned, CNN reported.